pil on ni act

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 8468 OF 2014(Arising out of S.L.P. (C) No.29044 of 2009)

Vinay Kumar Shailendra …Appellant

Versus

Delhi High Court Legal Services Committeeand Anr. …Respondents

With

CIVIL APPEAL NO. 8469 OF 2014(Arising out of SLP (C) No.35762/2009)

J U D G M E N T

T.S. THAKUR, J.

1. Leave granted.

2. These appeals arise out of a judgment dated 23rd

September, 2009 passed by a Division Bench of the High

Court of Delhi in W.P. (C) No. 11911 of 2009 whereby the

1

High Court has invoked its jurisdiction under Article 226 of

the Constitution of India read with Section 482 of Cr.P.C.

and directed return of all complaints filed under Section 138

of the Negotiable Instrument Act, 1881 in which the

Metropolitan Magistrates in Delhi have taken cognizance

only because the statutory notices in terms of proviso to

Section 138 of the Act have been issued to the drawers of

the cheque from Delhi. The matter arose out of a writ

petition filed by the Delhi High Court Legal Services

Committee in public interest pointing out that a very large

number of complaints under Section 138 of the Act were

pending in Courts of Metropolitan Magistrates in Delhi in

which cognizance had been taken although the Courts

concerned had no territorial jurisdiction to do so. The

Committee’s case before the High Court was that such

complaints were filed among others by financial institutions

and banks only on the ground that the statutory notices

demanding payment against the dishonoured cheque had

been issued from Delhi. Issue of a notice demanding

payment of the dishonoured cheque was not, however,

sufficient to confer jurisdiction upon the Courts in Delhi

2

argued the Committee. Reliance in support was placed upon

the decision of this Court in Harman Electronics Private

Limited and Anr. v. National Panasonic India Private

Limited (2009) 1 SCC 720. The Committee’s grievance

was that notwithstanding a clear exposition of law on the

subject by this Court in Harman’s case (supra) complaints

had been filed and cognizance taken by the Courts in Delhi,

relying upon the decision of this Court in K. Bhaskaran v.

Sankaran Vaidhyan Balan (1999) 7 SCC 510. It was in

terms contended before the High Court that in the light of

the pronouncement of this Court in Harman’s case (supra)

the complaints could not have been entertained nor could

the accused persons be summoned for trial in the Courts in

Delhi. It was also argued that number of such complaints is

so large that the Magistrates in Delhi were unable to handle

and effectively manage the docket explosion and attend to

what was otherwise within their jurisdiction and called for

their immediate attention.

3. The contentions urged by the Committee found favour

with the High Court who relying upon the decisions of this

3

Court in Dwarka Nath v. Income-tax Officer, Special

Circle, D Ward, Kanpur and Anr. (AIR 1966 SC 81) and

Air India Statutory Corporation and Ors. V. United

Labour Union and Ors. (1997) 9 SCC 377 held that the

Constitution did not place any fetters on the extraordinary

jurisdiction exercisable by the High Court in a situation

where Courts are flooded with complaints which they had no

jurisdiction to entertain. The High Court further held that a

direction for return of the complaints for presentation before

the competent Courts was in the circumstances necessary,

as Magistrates who had issued the summons were unable to

dismiss the complaints suo moto in the light of the decision

of this Court in Adalat Prasad Rooplal v. Jindal & Ors.

(2004) 7 SCC 338. The High Court accordingly allowed the

writ petition with the following directions:

“Consequently, in exercise of power under Article 226 of the Constitution read with Section 482 of Code of Criminal Procedure, we direct return to the complainants for presentation in the Court of competent jurisdiction all those criminal complaints filed under Section 138 of NI Act that are pending in the courts of Metropolitan Magistrates in Delhi in which cognizance has been taken by them without actually having territorial jurisdiction.”

4

4. The appellant who is a practicing Advocate of the High

Court of Delhi has, with the permission of this Court, filed

this appeal which was referred for hearing to a three-Judge

Bench by an order dated 3rd November, 2009. That is

precisely how the present appeal alongwith the connected

appeal filed by Indiabulls Financial Services Ltd. against the

very same order passed by the High Court have come up

before us.

5. We have heard learned counsel for the parties at some

length. The order passed by the High Court simply directs

return of complaints in cases where the same have been

filed only because the statutory notices have been issued

from Delhi. The direction proceeds on the basis that issue of

statutory notices from Delhi by itself is not sufficient to

confer jurisdiction on the Delhi Courts to entertain the

complaints. Reliance has been placed for that proposition

upon the decision of this Court in Harman’s case (supra).

In Dashrath Rupsingh Rathod v. State of Maharashtra

and Anr. (2014) 9 SCALE 97 we have had an occasion to

consider whether the view expressed by this Court in K.

5

Bhaskaran’s case (supra) was sound and whether

complaints under Section 138 could be maintained at a place

other than the place where the drawee bank is situate.

Answering the question in the negative this Court held that

an offence under Section 138 is committed no sooner the

cheque issued on an account maintained by the drawer with

a bank and representing discharge of a debt or a liability in

full or part is dishonoured on the ground of insufficiency of

funds or on the ground that the same exceeds the

arrangements made with the banker. Prosecution of the

offender and cognizance of the commission of the offence is,

however, deferred by the proviso to Section 138 till such

time the complainant has the cause of action to institute

such proceedings. This Court found that the proviso to

Section 138 does not constitute ingredients of the offence

punishable under Section 138. The legal position on the

subject was summed up in the following words:

“To sum up:

(i) An offence under Section 138 of the Negotiable Instruments Act, 1881 is committed no sooner a cheque drawn by the accused on an account being maintained by him in a bank for discharge of debt/liability is returned unpaid for insufficiency of

6

funds or for the reason that the amount exceeds the arrangement made with the bank.(ii) Cognizance of any such offence is however forbidden under Section 142 of the Act except upon a complaint in writing made by the payee or holder of the cheque in due course within a period of one month from the date the cause of action accrues to such payee or holder under clause (c) of proviso to Section 138.(iii) The cause of action to file a complaint accrues to a complainant/payee/holder of a cheque in due course if

(a) the dishonoured cheque is presented to the drawee bank within a period of six months from the date of its issue.(b) If the complainant has demanded payment of cheque amount within thirty days of receipt of information by him from the bank regarding the dishonour of the cheque and(c) If the drawer has failed to pay the cheque amount within fifteen days of receipt of such notice.

(iv) The facts constituting cause of action do not constitute the ingredients of the offence under Section 138 of the Act.(v) The proviso to Section 138 simply postpones/defers institution of criminal proceedings and taking of cognizance by the Court till such time cause of action in terms of clause (c) of proviso accrues to the complainant.(vi) Once the cause of action accrues to the complainant, the jurisdiction of the Court to try the case will be determined by reference to the place where the cheque is dishonoured.(vii) The general rule stipulated under Section 177 of Cr.P.C applies to cases under Section 138 of the Negotiable Instruments Act. Prosecution in such cases can, therefore, be launched against the drawer of the cheque only before the Court within whose jurisdiction the dishonour takes place except in situations where the offence of dishonour of the cheque punishable under Section 138 is committed along with other offences in a single transaction within the meaning of Section 220(1) read with Section 184 of the Code of Criminal Procedure or is covered by the provisions of Section 182(1) read with Sections 184 and 220 thereof.”

7

6. In the light of the above pronouncement of this Court

we have no hesitation in holding that the issue of a notice

from Delhi or deposit of the cheque in a Delhi bank by the

payee or receipt of the notice by the accused demanding

payment in Delhi would not confer jurisdiction upon the

Courts in Delhi. What is important is whether the drawee

bank who dishonoured the cheque is situate within the

jurisdiction of the Court taking cognizance. In that view, we

see no reason to interfere with the order passed by the High

Court which simply requires the Magistrate to examine and

return the complaints if they do not have the jurisdiction to

entertain the same in the light of the legal position as stated

in Harman’s case (supra). All that we need to add is that

while examining the question of jurisdiction the Metropolitan

Magistrates concerned to whom the High Court has issued

directions shall also keep in view the decision of this Court in

Dashrath’s case (supra).

7. With the above observations these appeals fail and are

hereby dismissed but in the circumstances without any

orders as to costs.

8

………………………………….…..…J. (T.S. THAKUR)

.……………………………….…..…J. (V. GOPALA GOWDA)

………………………..……………..J. (C. NAGAPPAN)

New DelhiSeptember 4, 2014

9

REPORTABLE


CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 1911 OF 2014(Arising out of S.L.P. (Crl.) No.5644 of 2010)

Times Business Solution Limited …Appellant

Versus

Databyte …Respondent

WithCRIMINAL APPEAL NO. 1912 OF 2014

(Arising out of S.L.P. (Crl.) No.5645 of 2010) With


J U D G M E N T

T.S. THAKUR, J.

1. Leave granted.

2. These three appeals arise out of an order dated 1st

February, 2010 passed by the High Court of Bombay

whereby Criminal M.C. Nos. 281 of 2010, 282 of 2010 and

296 of 2010 filed by the appellants have been dismissed and

the orders passed by the Metropolitan Magistrate returning

10

the complaints filed by the appellants under Section 138 of

the Negotiable Instrument Act, 1881 for presentation before

the competent Court upheld.

3. It is common ground that the cheques in all the three

cases had been issued on different branches namely, Bank

of India, Ruby Park and ICICI Bank, Kolkata and Punjab

National Bank, Chapraula, Gautam Budh Nagar, U.P. which

are outside Delhi. Complaints under Section 138 of the NI

Act were all the same filed in Delhi because the cheques had

been deposited by the complainants in their Delhi bank

accounts for collection and because notice of dishonour was

issued to the accused persons from Delhi. Relying upon the

decision of this Court in Ishar Alloy Steels Ltd. v.

Jayaswals Neco Ltd. (2001) 3 SCC 609 the High Court

held that mere presentation of cheques before banks in

Delhi when the drawee bank is situated outside Delhi will not

confer jurisdiction upon the Delhi courts nor will the issue of

a notice of dishonour from Delhi would do so. That view, in

our opinion, is unexceptionable having regard to the decision

of this Court in Dashrath Rupsingh Rathod v. State of

11

Maharashtra and Another (2014) 9 SCALE 97. This

Court has in that case examined at length the principles

underlying Section 138 and held that a unilateral act of

presentation of the cheque anywhere in the country or issue

of a notice of dishonour from a place chosen by the

complainant does not by itself confer jurisdiction upon the

Court from within whose jurisdiction such presentation is

made or notice issued. Following the view taken by this

Court in Dashrath’s case (supra) we have no hesitation in

holding that the High Court was justified in refusing to

interfere with the orders passed by the Metropolitan

Magistrate. These appeals accordingly fail and are hereby

dismissed but in the circumstances without any no orders as

to costs.

………………………………….…..…J. (T.S. THAKUR)

.……………………………….…..…J. (V. GOPALA GOWDA)

………………………..……………..J. (C. NAGAPPAN)


12

REPORTABLE



CRIMINAL APPEAL NO. 1914 OF 2014

(Arising out of S.L.P. (Crl.) No.690 of 2011)

M/s K K. Ploycolor India Ltd. & Ors. …Appellants

Versus

Global Trade Finance Ltd. & Anr. …Respondents

With


With


J U D G M E N T

T.S. THAKUR, J.

1. Leave granted.

2. These appeals arise out of an order dated 15th

September, 2010 passed by the High Court of Judicature at

Bombay whereby Crl. Application Nos.1491, 2759 and 2760

of 2010 have been allowed and the orders passed by the

Magistrate set aside and the matter remitted back to the

13

Magistrate with the direction that the criminal complaints

filed by the complainants-respondents herein shall be

disposed of expeditiously.

3. Complaints under Section 138 of the Negotiable

Instrument Act, 1880 appear to have been filed by the

respondent-company in the Court of Metropolitan

Magistrate, Bandra which were entertained by the

Magistrate and process issued against the accused persons.

Revision applications were then filed before the Court of

Sessions at Bombay challenging the jurisdiction of the

Magistrate to entertain the complaints. The Revisional Court

relying upon Harman Electronics Private Limited and

Anr. v. National Panasonic India Private Limited

(2009) 1 SCC 720 held that the Magistrate did not have

the jurisdiction to entertain the complaints. The orders

passed by the Magistrate were set aside and the complaints

directed to be returned for presentation before the

competent Court. Aggrieved by the said orders the

complainant preferred Criminal Applications No.1491, 2759

and 2760 of 2010 before the High Court who relying upon

14

the decision of this Court in K. Bhaskaran v. Sankaran

Vaidhyan Balan (1999) 7 SCC 510 and three other

decisions of the Bombay High Court held that the Magistrate

had the jurisdiction to entertain the complaint as the cheque

had been presented before a bank at Bombay which fact

was, according to the High Court, sufficient to confer

jurisdiction upon the Magistrate to entertain the complaints

and try the cases. The orders passed by the Revisional Court

were accordingly set aside and the Magistrate directed to

proceed with the trial of the cases expeditiously as already

noticed. The present special leave petitions have been filed

by the accused persons assailing the view taken by the High

Court.

4. A plain reading of the orders passed by the High Court

would show that the judgment proceeds entirely on the

authority of the decision of this Court in K. Bhaskaran’s

case (supra). That decision has been reversed by this Court

in Dashrath Rupsingh Rathod v. State of Maharashtra

and Anr. (2014) 9 SCALE 97. This Court has, on an

elaborate consideration of the provision of Section 138 and

15

the law on the subject, held that presentation of a cheque

for collection on the drawee bank or issue of a notice from a

place of the choice of the complainant would not by

themselves confer jurisdiction upon the Courts where

cheque is presented for collection or the default notice

issued demanding payment from the drawer of the cheque.

Following the said decision we have no hesitation in holding

that the High Court was wrong in interfering with the order

passed by the Sessions Judge.

5. We accordingly allow these appeals and set aside the

order passed by the High Court and restore those passed by

the Revisional Court. The parties are, however, left to bear

their own costs.

………………………………….…..…J. (T.S. THAKUR)

.……………………………….…..…J. (V. GOPALA GOWDA)

………………………..……………..J. (C. NAGAPPAN)

New Delhi

16

September 4, 2014

17

REPORTABLE




Suku …Appellant

Versus

Jagdish and Anr. …Respondents

With


J U D G M E N T

T.S. THAKUR, J.

1. Leave granted.

2. These appeals arise out of an order dated 15th June,

2011 passed by the High Court of Kerala at Ernakulam

whereby the High Court has held that the presentation of a

18

cheque by the complainant in a bank at Krishnapuram,

Kayamkulam, Kerala did not confer jurisdiction upon Courts

at Kayamkulam to entertain a complaint under Section 138

of the Negotiable Instruments Act and try the accused

persons for the offence.

3. It is not in dispute that the cheque in question was

issued by the respondent on Syndicate Bank, Gokaran

branch in Karnataka which was presented for collection by

the complainant at Krishnapuram, Kayamkulam, Kerala but

dishonoured for insufficiency of funds. The complainant then

filed complaint at Kayamkulam in the State of Kerala which

were returned by the Magistrate to be filed before the

proper Court as the Court at Kayamkulam, Kerala, had no

territorial jurisdiction to entertain the same. The matter was

taken up before the High Court by the complainants in Crl.

M.C. Nos.514 of 2011 and 1653 of 2011 which the High

Court has dismissed by the impugned order holding that the

presentation of the cheque to a Bank in Kerala would not by

itself confer jurisdiction upon the Kerala Court. The High

Court has in support of that view relied upon the decision of

19

this Court in Harman Electronics Private Limited and

Anr. v. National Panasonic India Private Limited

(2009) 1 SCC 720 where this Court held that the issue of

notice to the drawer of the cheque does not by itself give

rise to a cause of action to confer jurisdiction upon the Court

to take cognizance.

4. The view taken by the Magistrate based as it is on the

decision of this Court in Harman’s case (supra) does not, in

our opinion, call for any interference by this Court, in the

light of the pronouncement of this Court in Dashrath

Rupsingh Rathod v. State of Maharashtra and Another

(2014) 9 SCALE 97 where this Court has examined the

issue at some length and held that presentation of a cheque

by the complainant at a place of his choice or issue of notice

by him to the accused demanding payment of the cheque

amount are not sufficient by themselves to confer

jurisdiction upon the courts where such cheque was

presented or notice issued. Following the decision in

Dashrath Rupsingh Rathod’s case (supra), we affirm the

order passed by the High Court.

20

5. These appeals accordingly fail and are, hereby,

dismissed but in the circumstances without any orders as to

costs.

………………………………….…..…J. (T.S. THAKUR)

.……………………………….…..…J. (V. GOPALA GOWDA)

………………………..……………..J. (C. NAGAPPAN)


21

REPPORTABLE


CRIMINAL ORIGINAL JURISDICTION

TRANSFER PETITION (CRL.)NO. 338 OF 2010

T.A.M.A. Jawahar …Appellant

Versus

Arun Kumar Gupta …Respondent

AND

TRANSFERRED CASE (CRL.) NO.4 OF 2012

J U D G M E N T

T.S. THAKUR, J.

Transfer Petition (Crl.) No.338 of 2010 and Transferred

Case (Crl.) No.4 of 2012 are delinked and to be posted for

hearing separately.

………………………………….…..…J. (T.S. THAKUR)

.……………………………….…..…J. (V. GOPALA GOWDA)

………………………..……………..J. (C. NAGAPPAN)


22

pil on ni act

Documents

high court of delhi

1page2high court

delhi 2page3argued

large number of complaints

territorial jurisdiction

statutory notices

constitution of india

harmans case